The Dow and S&P 500 closed at record highs Thursday, even as a steep drop in Oracle shares weighed on the Nasdaq and reignited concerns over high AI valuations. Gains followed positive trading in Europe and mixed results in Asia, reflecting optimism after the Federal Reserve cut interest rates on Wednesday and offered a less hawkish outlook than expected. Banks and industrial stocks led the Dow, which rose 1.3 percent, while the Nasdaq fell 0.3 percent.
“Even as investors were reassured by the Fed's latest rate cut, familiar concerns about AI remain top of mind,” said Deutsche Bank managing director Jim Reid. Those concerns were heightened after Oracle reported quarterly revenue below expectations and revealed increased spending on data centers to expand AI capacity. Shares fell 10.8 percent, underscoring investor caution about aggressive AI investments financed with debt, according to Dave Grecsek of Aspiriant Wealth Management.
Global markets had wobbled last month amid fears of an AI bubble, with some analysts warning of potential losses if speculative spending fails to deliver returns. The Fed’s decision to cut rates—its third consecutive reduction—aims to support a softening U.S. labor market. Despite the cut, three dissents highlighted uncertainty over future monetary policy, leaving investors closely watching next week’s economic data.
“Fed Chair Jerome Powell noted that none of the policymakers expects rate hikes in 2026 under their baseline scenario,” said eToro analyst Bret Kenwell. He added that lower rates and a lack of hawkish signals could support a year-end equity rally.
Disney shares jumped 2.4 percent following news of a three-year licensing deal with OpenAI that will allow fans to create AI-generated videos featuring Disney characters.
At the close of trading, the Dow finished at 48,704.01, up 1.3 percent. The S&P 500 ended at 6,901.00, up 0.2 percent, while the Nasdaq Composite fell 0.3 percent to 23,593.86. In Europe, London’s FTSE 100 rose 0.5 percent to 9,703.16, Paris’s CAC 40 gained 0.8 percent to 8,085.76, and Frankfurt’s DAX added 0.7 percent to 24,294.61. In Asia, Tokyo’s Nikkei 225 declined 0.9 percent to 50,148.82, Hong Kong’s Hang Seng was flat at 25,530.51, and Shanghai’s Composite fell 0.7 percent to 3,873.32.
The dollar weakened against major currencies, trading at 155.58 yen compared with 156.02 yen on Wednesday, while the euro rose to $1.1741 from $1.1695 and the pound traded at $1.3394, up from $1.3383. Oil prices retreated, with Brent North Sea crude at $61.28 per barrel and West Texas Intermediate at $57.60 per barrel, each down 1.5 percent.
Source: AFP
Bd-pratidin English/ Jisan
